Patterns in agriculture sector

27.08.2015

During CER research on food security and the efficient use of land and water resources, we have come to the conclusion that the increase in the size of farms in the agriculture sector can contribute to more efficient production.

So, according to the estimations, for the implementation of the economy of scale it is required to increase the size of livestock farms at least up to 1000 heads of livestock, vegetable farms – up to 85 hectares, gardening farms – 40 hectares. We were also able to estimate that the livestock productivity could increase by 35% by optimizing the size.

Reforming institutions and a significant increase in the size of livestock, gardening and vegetable growing farms will specify the necessity to reform the marketing and distribution of products. In particular, for establishing effective linkages and minimizing transaction costs between production, distribution and consumption of agricultural products in the new circumstances, it may become appropriate to move from trading in the markets to trading in grocery stores and large supermarkets.

Can Large agricultural enterprises become the drivers of growth and of the modernization of agriculture sector? Join the discussion and share your opinion on our Transformation Blog.